HomeMy WebLinkAbout1219 SchwagerIn Re: G. Mark Schwager
File Docket:
X -ref:
Date Decided:
Date Mailed:
Before: Daneen E. Reese, Chair
Louis W. Fryman, Vice Chair
John J. Bolger
Frank M. Brown
Susan Mosites Bicket
Donald M. McCurdy
00- 031 -C2
Order No. 1219
8/23/01
9/7/01
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission conducted
an investigation regarding a possible violation of the Public Official and Employee Ethics
Act, Act 9 of 1989, P.L. 26, 65 P.S. §401 et seq., as codified by Act 93 of 1998, Chapter 11,
65 Pa.C.S. §1101 et seq., by the above -named Respondent. At the commencement of its
investigation, the Investigative Division served upon Respondent written notice of the
specific allegation(s). Upon completion of its investigation, the Investigative Division
issued and served upon Respondent a Findings Report identified as an "Investigative
Complaint." An Answer was not filed and a hearing was waived. The record is complete.
A Consent Agreement and Stipulation of Findings were submitted by the parties to the
Commission for consideration. The Consent Agreement was subsequently approved.
Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter
11 of Act 93 of 1998, 65 Pa.C.S. §1101 et seq., which essentially repeats Act 9 of 1989
and provides for the completion of pending matters under Act 93 of 1998.
This adjudication of the State Ethics Commission is issued under Act 93 of 1998
and will be made available as a public document thirty days after the mailing date noted
above. However, reconsideration may be requested. Any reconsideration request must be
received at this Commission within thirty days of the mailing date and must include a
detailed explanation of the reasons as to why reconsideration should be granted in
conformity with 51 Pa. Code §21.29(b). A request for reconsideration will not affect the
finality of this adjudication but will defer its public release pending action on the request by
the Commission.
The files in this case will remain confidential in accordance with Chapter 11 of Act
93 of 1998. Any person who violates confidentiality of the Ethics Act is guilty of a
misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than
one year. Confidentiality does not preclude discussing this case with an attorney at law.
Schwager, 00- 031 -C2
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I. ALLEGATION:
That G. Mark Schwager, a public employee in his capacity as an Architectural
Manager 1, Pennsylvania Department of General Services, Bureau of Engineer and
Architecture, violated Sections 3(a)/1103(a) and 5(b)(5)/1105(b)(5) of the Ethics Act (Act
93 of 1998, 65 Pa.C.S. §1101 et seq.) when he used the authority of his office for a private
pecuniary benefit by recommending that a mural be painted in the Pennsylvania State
Lottery Building, participating in the drafting of plans, and determining costs for the mural;
when he subcontracted with the general contractor to paint the mural; when he utilized
Commonwealth employees to assist in the drawing of the mural; when he and
Commonwealth employees did design work for the mural while on Commonwealth time;
and when he failed to disclose income received from Cumberland Management on the
Statement of Financial Interests for the 1999 calendar year.
II. FINDINGS:
1. Mark Schwager has been employed by the Commonwealth of Pennsylvania
Department of General Services, Bureau of Engineering and Architecture since
April 30, 1989.
a. Schwager holds the position of Chief of the Architectural Design Division.
1. Robert L. Glenn, Director, Bureau of Engineering and Architecture is
Schwager's immediate supervisor.
2. Schwager's general job duties as Chief of the Architectural Design include being
responsible for the management and supervision over all projects and in -house
architectural design work.
a. Schwager's job description also includes the following 15 specific job
functions /duties:
Performs responsibilities on own initiative exercising ingenuity, originality,
resourcefulness and good judgment within a broad framework of Public
Works and Departmental established policies, procedures and regulations;
soliciting advice from supervisor only on matters having significant
ramifications and effects on other organizational elements.
Directs the activities and assignments of subordinate employees engaged in
project management, in -house drafting and design work and
survey /estimating services.
Directs the preparation of designs, plans, specifications and estimates for all
types of architectural engineering work relative to Commonwealth
construction and renovation projects.
Directs the activities of the Specifications Section in preparing draft and final
specifications for bidding as submitted by the Architectural and engineering
Design Divisions.
Plans & directs coordinating and scheduling activities relating to requests for
in -house design and survey /estimating services submitted by Using
Agencies for architectural services. Duty includes determining actual scope
of work, distributing work to the appropriate Section(s) for action and
submitting design packages for bidding.
Schwager, 00- 031 -C2
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Plans and directs the review of all designs, plans, specifications and
estimates for all types of architectural work and has over - riding approval
authority.
Coordinates and communicates with officials and representatives from other
Commonwealth Agencies, Boards & Commissions to explain the Bureau's
position or to develop, plan and support new and proposed programs to
meet operational, special or emergency objectives.
Resolves technical problems and contractual disputes with retained Design
Professional and /or Contractors through the preparation of correspondence,
informal discussions /negotiations and participation at Pre -Claim
meetings /Legal claims for projects involving architectural design issues.
Recommends the development of policies, establishes and implements
consistent standards, systems and procedures governing the preparation of
plans, specifications and submissions to Regulatory Agencies by in -house or
contractual requirements. Duty includes rendering of final approval authority
and for in -house projects, the signing of documents and affixing of a
professional seal.
Develops reporting system /logs to maintain progress reports /schedules
relating to the overall construction and renovations to Commonwealth
special projects, buildings and facilities. Monitors progress and assists
subordinates through periodic review of work assignments, offering solutions
and taking appropriate actions to insure correct and timely results.
Maintains liaison with all Public Work Bureaus and Support Offices insuring
through coordination and assistance in the review and processing of
amendments, bid documents, analysis of responsible bids received,
technical recommendations for subsequent award, resolving construction
problems with design implications and in the management of change orders.
Through consultations, symposia and research, is knowledgeable on current
architectural practices and techniques and state of the art changes and
applies necessary steps to improve staff proficiency, design, procedure and
methods.
Is responsible for the results, efficiency, technical proficiency and
professional development of all Division employees. Duty includes
development of staff in skills and disciplines consistent with job
classifications and appropriate distribution and assignment of
responsibilities.
Provides the full range of personal management and leadership functions to
assigned staff, setting the example, counseling, rating performance,
resolving minor complaints, correcting infractions and recommending action
to be taken involving serious grievances or disciplinary actions. Duty
involves monitoring adherence to the principles and objectives of the
Department's Affirmative Action Plan and the review of candidates'
application considered for appointment or promotion.
Insures all assigned employees adhere to attendance rules and standards,
that the Division maintains adequate and optimum staffing of positions at all
times and that meeting commitments are satisfied in a punctual and thorough
manner.
Schwager, 00- 031 -C2
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Perform other related duties and functions, as necessary or required, that
are consistent with incumbent's technical competence and /or managerial/
leadership status.
3. In his capacity as Chief of the Architectural Design Division, Schwager has overall
responsibility for supervising all employees within the Architectural Design Division.
a. Three supervisors within that division who reported directly in 1998 or 1999
to Schwager were:
Melvyn Jacobson
Ronald Pontius
Robert Zeigler
b. Schwager is the architect of record for all in -house design projects
completed by the Architectural Design Division.
4. Employees of the Department of General Services are permitted to have
supplemental employment with departmental approval provided the supplemental
employment does not constitute a conflict of interest or interfere with the
employee's responsibility to the Commonwealth.
5. Schwager filed a request for supplemental employment approval with John R.
McCarty, DGS Deputy Secretary for Administration on or about August 6, 1997.
a. Schwager requested supplemental employment approval as a self employed
artist; "doing privately commissioned artwork, usually portraits of various
individuals intermittently four or five times a year usually around holidays."
b. Gregory A. Green, Director, Bureau of Personnel, recommended approval of
Schwager's request to John R. McCarty, Department of General Services,
Deputy Secretary, on September 16, 1997.
6. On October 17, 1997, McCarty approved Schwager's supplemental employment
request subject to the following conditions:
a. Business cannot be conducted with any Commonwealth agency or other
entity.
Information or data obtained or derived from Commonwealth employment
cannot be used to further private business interests.
Private business conflicting with or accruing from Commonwealth
employment cannot be accepted.
Solicitations for work in connection with your supplementary employment
cannot be made during working hours or at Commonwealth facilities.
Commonwealth property cannot be used during the course of your
supplemental activities.
You are prohibited from conducting any private business in Commonwealth
offices at any time before, during, or after normal business hours.
b. Should there be any change to the nature or conditions of either
Commonwealth or supplementary employment, a new Supplementary
Schwager, 00- 031 -C2
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Employment Request (STD -355) must be submitted for approval.
7 Schwager had similar requests for supplemental employment approved prior to
October 1997.
8. In 1998 and continuing in 1999 and 2000 DGS's Bureau of Engineering and
Architecture became involved with a renovation project for the Pennsylvania State
Lottery.
9. The State Lottery Bureau is a division of the Pennsylvania Department of Revenue.
a. Lottery headquarters and executive offices are located at 2850 Turnpike
Industrial Drive, Middletown, PA 17057.
b. Lottery also has field offices located in Harrisburg, Wilkes- Barre, Bethlehem,
Erie, Pittsburgh, Philadelphia and Clearfield.
c. The day -to -day operation of Lottery is overseen by the Lottery's Executive
Director.
d. The Executive Director of Lottery reports directly to the Secretary of
Revenue.
10. Lottery headquarters and executive offices in Middletown are located on property
leased from Heartland Properties limited Partnership t/a Cumberland Management,
75 Utley Drive, Camp Hill, Pennsylvania 17011.
a. Lottery has leased this property from Cumberland Management since at
least August 11, 1987.
b. The lease for the Lottery was entered into between the Commonwealth of
Pennsylvania acting through the Department of General Services, agent for
the Department of Revenue and Heartland Properties Limited Partnership,
t/a Cumberland Management.
c. Lease I.D. #99069 was assigned to this agreement.
d. This lease covered the period from August 11, 1987, to December 1, 2001.
11. Cumberland Management has managed this property since about June 2, 1987.
a. Brett Crans has served as the property manager on behalf of Cumberland
Management at all times relevant to this investigation.
12. On or about March 20, 1998, Brett Crans, Property Manager for Cumberland
Management officially contacted Daniel Cook, Executive Director Lottery, inquiring
whether Lottery was interested in renewing its lease beyond December 2001 and
what improvements would need to be made by Cumberland Management for Lottery
to renew the lease.
a. The property Lottery was leasing from Cumberland Management needed
renovated if Lottery was to continue to occupy it.
b. Informal discussions about renovating the property occurred between
Cumberland Management and lottery officials as early as the latter part of
1997.
Schwager, 00- 031 -C2
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c. Both Cook and Revenue Secretary Robert Judge were of the opinion that
they should have Cumberland Management renovate Lottery's current
leased facility instead of relocating Lottery headquarters.
13. Robin Costenbader- Jacobson served as the Deputy Executive Director of Lottery
from December 1, 1997, until February 12, 1999.
a. Costenbader- Jacobson assumed an active role overseeing the renovation
project from the beginning.
b. Costenbader- Jacobson made the renovation project one of her priorities.
c. Costenbader- Jacobson is the wife of Melvyn Jacobson, a supervisor for the
Architectural Design Division of DGS.
14. A core group of Lottery employees, including Executive Director Daniel Cook,
Deputy Executive Director Robin Costenbader- Jacobson and Director of
Administration William Waddington had numerous discussions during the spring of
1998 with Brett Crans of Cumberland Management regarding the project.
15. Robin Costenbader- Jacobson recommended seeking design changes for the layout
of the building from DGS's Bureau of Engineering and Architecture.
a. At the time of Costenbader - Jacobson's recommendation, her husband,
Melvyn Jacobson, had recently been hired as an architect by the
Architectural Design Division.
16. On January 14, 1998, William Waddington, Director of Administration for the Lottery
faxed an Agency Project Work Request form to DGS's Bureau of Professional
Selection and Administrative Services.
a. The request was approved by Irene Fisher, Bureau Director on January 16,
1998.
b. At that time, DGS Project No. A1400 -48 was assigned.
c. The scope of work included the renovation of existing office space with build
outs for new offices in areas currently occupied by warehouse replacement
of office cubicles, carpeting, furniture, etc., need floor plans, costs, etc.
17. On January 15, 1998, Lottery requested that the Bureau of Engineering conduct a
survey and cost estimate for the renovation of office space in Lottery headquarters.
a. This request was received by DGS's Bureau of Engineering and Architecture
on January 20, 1998.
18. It is unusual for the Architectural Design Division (ADD) to do the design layout for
space leased by the Commonwealth in privately owned buildings.
a. The ADD generally designs space for Commonwealth owned buildings.
b. According to Robert L. Glenn, Director Bureau of Engineering and
Architecture, it is not a standard practice for that bureau to perform design
work for renovations to buildings which are not state owned.
1. The department got involved because Melvyn Jacobson's wife, Robin
Costenbader- Jacobson, employed as the Deputy Executive Director
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Page 7
of Lottery, requested their involvement.
19. Schwager, in his capacity as Chief of the Architectural Design Division was
assigned the project which included conducting a survey and cost estimate for the
Lottery renovations.
20. Schwager assigned Melvyn Jacobson project supervisor to conduct the survey and
cost estimates.
a. This was one of Jacobson's first projects for DGS.
b. Schwager assigned Jacobson to the project because of Robin Costenbader-
Jacobson's involvement with the project.
1. Jacobson had insisted on being involved with the project.
2. Schwager assigned Jacobson to avoid disruptions to the office work
flow due to prior incidents with Jacobson.
c. Jacobson completed the survey on or about April 15, 1998.
21. When completing the survey, Jacobson met with Steve Williams, Draftsman
Designer, DGS, Daniel Cook, William Waddington, William Fehl, Department of
Revenue, Chief of Facilities Management and Jacobson's wife, Robin Costenbader-
Jacobson.
a. Jacobson would keep Schwager apprised on the discussions and progress
made.
b. Schwager had oversight of Jacobson's actions and /or decisions made in the
planning process.
22. Melvyn Jacobson completed renovation design drawings on or about April 15, 1998,
in his official capacity as an Architectural Supervisor for DGS.
a. It is a standard practice of the Architectural Design Division for the project
supervisor to prepare cost estimates.
b. Jacobson used a main street storefront as his concept for the project.
c. Jacobson's design left one wall at least 120 feet in length with nothing on it.
1. This was not immediately accessible to the general public.
d. This wall was located in a secured area of Lottery headquarters.
e. Jacobson's design work was supervised by Mark Schwager.
23. During design phase of the Lottery renovation project, Schwager and Jacobson
discussed various options to finish the 120 foot wall.
a. Both agreed that a mural depicting Pennsylvania was a good option for the
wall.
b. Jacobson asked Schwager for an estimate as to costs of such a mural since
Schwager had previously painted a mural.
Schwager, 00- 031 -C2
Page 8
c. Schwager provided Jacobson's with a rough estimate of $10,000.
1. Schwager was not aware that Jacobson intended to use his guess as
the sole figure when doing the estimate.
24. The idea of the mural was proposed by Jacobson to a building committee of Lottery
employees.
a. This committee concurred with Jacobson's idea for a mural.
25. Neither Lottery officials nor Crans had suggested a mural to complete the wall.
a. Plans for the mural were created by Schwager and Jacobson.
b. Lottery did not request a mural as part of the project.
c. The wall that the mural was to be attached to was in a secured area.
26. The $10,000 estimate for the mural was included in the project cost developed by
Jacobson.
a. The costs were approved by Brett Crans of Cumberland Management and
Lottery officials.
27. Estimated project expense summaries dated as early as September 18, 1998,
included funding budgeted for the mural under Section 9, miscellaneous hard costs.
a. Detailed in section 9 were the following miscellaneous hard costs:
9.1 Store Front Facades $18,000
9.2 Wall Mural 10,000
93. Half Column — 10' ionic 4,950
9.4 Shadow Box Fencing /Screen 1,248
$34,198
28. An October 28, 1998, projected income and expense summary contained the
following estimates for the entire project.
Hard Costs
Demolition $ 53,343
General Construction $ 214,696
Electrical $ 129,104
Floor Coverings $ 76,065
Mechanical $ 23,825
Painting & Wall Finishes $ 28,970
Plumbing $ 7,978
Sprinkler Sys /Fire Safety $ 56,846
Miscellaneous $ 34,198
Subtotal Hard Costs $ 625,025
Cost P.S.F. 6.104714
Soft Costs
Contingency (10 %) $ 62,503
Architectural /Engineering (1.5 %) 0
Permits /Inspections (1.5 %) $ 9,375
Overhead (10 %) $ 62,503
Profit (5 %) $ 31,251
Schwager, 00- 031 -C2
Page 9
Subtotal Soft Costs
Cost P.S.F.
Total Office Renovation Costs
Cost P.S.F.
Income
PA Lottery /Dept. of Revenue
Total Owner Cost /Contribution
Cost P.S.F.
$ 165,632
1.617749
$ 790,657
7.722
$ 616,842
$ 173,815
1.698
29. The project expense summaries dated September 18, 1998, and October 18, 1998,
which included the mural costs were prepared by Jacobson and reviewed and
approved by Schwager in their official capacities as DGS employees.
a. Jacobson participated in preparing the pricing while Schwager approved
Jacobson's work.
b. Schwager only did a cursory review of Jacobson's project expense
summaries.
1. Due to Jacobson's experience, Schwager would only passively review
Jacobson's work unless specific questions were raised.
2. Jacobson was highly resistant to any input from Schwager.
30. Sometime during late September or early October 1999 Schwager and Jacobson
discussed the Lottery project during the normal course of business.
a. Schwager was asked by Jacobson to assist with the mural.
b. Schwager inquired as to whether Cumberland Management ever selected a
vendor to paint the mural.
1. Schwager thought the project might not move forward because there
was no word from Lottery from October or November 1998 until April
1999.
c. This was in part due to Lottery not yet authorizing the release of funding for
the project.
31. On or about November 12, 1998, Schwager approached Robert Glenn seeking
permission to paint the mural for the Lottery renovation project and receive
compensation for the same.
a. Schwager did not inform Glenn that he was going to enter into a contract
with Cumberland Management to paint the mural.
1 Schwager believed at that time he would be contracting with Lottery.
2. Schwager did not know Cumberland Management's role in the
selection of a contractor to do the mural.
3. Schwager believed the mural work would be put out for bid.
b. Schwager believed that he advised Glenn that he and Jacobson had
Schwager, 00- 031 -C2
Page 10
originated the concept of the mural as part of their office's duties.
c. Glenn would not have granted permission to Schwager's request if
Schwager had informed him that he would be contracting with Cumberland
Management.
d. Glenn took Schwager's request to Nora Doyle, Assistant Counsel, DGS for
approval.
32. On November 12, 1998, Nora Doyle, Assistant Counsel DGS, provided advice via
e -mail to Bob Glenn, Mark Schwager's supervisor relating to Schwager painting the
mural. Doyle's' advice to Glenn contained the following information:
a. "I spoke to Gary (Ankerbrandt). He said that it would be ok for Mark to do
the work so long as he is not being paid by DGS to do it. It's a close call, but
so long as it really isn't the type of work that he does normally, and it is
another agency paying for it, Gary said to tell him to go ahead."
33. At the time she issued the e-mail advice, Norma Doyle believed that Schwager was
going to perform paint work for the Department of Revenue, not a private contractor
dealing with the state.
a.
b.
c.
d.
Doyle did not know that the paint work was part of a renovation project
Schwager was overseeing in his official capacity as a state employee.
Schwager did not advise Doyle of his oversight role in the Lottery project.
At the time he sought the advice, Schwager did not know that Melvyn
Jacobson was going to be involved with the mural painting at all.
Doyle did not provide any legal advice to Jacobson.
34. Schwager did not submit a supplemental employment request seeking specific
approval to paint the mural.
a. Schwager believed the request approved in 1997 by McCarty would include
the painting of the mural.
35. Schwager and Jacobson, in their official capacities as DGS employees were
responsible for the review and approval of project cost estimates prior to the
commitment of any state funding.
a. Jacobson had been delegated to exercise department authority in regards to
approving project cost estimates.
36. The Department of Revenue approved funding for the Lottery Revenue project in an
amount of $640,094.00 on or about July 3, 1999.
37. On July 6, 1999, DGS, as agent for the Department of Revenue, entered into lease
amendment ID #99069 -3 with Heartland Properties Limited Partnership t/a
Cumberland Management.
a. This agreement amended lease #99069 between the aforementioned parties.
b. The purpose for the lease amendment was to provide funding for
renovations to Lottery's leased headquarters and extend the lease for an
additional five (5) year period commencing on December 1, 2001.
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Page 11
38. Contained in lease ID #99069 -3 were provisions for a four (4) phase renovation
project totaling $640,094.00 to the leased property.
a. Payments were to be made at the completion of each phase as follows:
Phase 1
Phase 11
Phase III
Phase IV
Total
Eight (8) weeks
Six (6) weeks
Three (3) weeks
Four (4) weeks
$ 402, 580.92
90, 599.00
52,697.26
94,216.82
$ 640, 094.00
39. The phases of the renovations to Lottery executive offices included the following:
a. Phase 1 included construction and completion for departments and offices
including: administration, budget, computer services, games, public
relations, security, training and lunch /smoking.
b. Phase II included construction and completion of space to be used by the
marketing department.
c. Phase III included general construction and furniture /equipment installation.
d. Phase IV included construction and completion of the executive offices and
any outstanding work.
40. Completion of the wall mural was not needed until the end of Phase IV after all
construction was completed.
41. A project expense summary included as part of the lease amendment dated July 6,
1999, contained a budgeted amount of $10,000 for a mural under Section 9.
42. The $10,000 mural estimate was included by Jacobson after consultation with
Schwager.
a. Jacobson asked Schwager for an estimate of the mural cost.
b. Jacobson was aware that Schwager had done a mural in the past.
43. As lead architect Jacobson had primary responsibility of project expense summaries
and design layout of DGS's Bureau of Engineering and Architecture.
a. The layout included the mural and associated cost of $10,000.
b. Jacobson had been delegated that responsibility by Schwager.
c. Schwager had responsibility for reviewing Jacobson's work projects.
44. Schwager, as Jacobson's immediate supervisor, oversaw and approved Jacobson's
work on the project.
a. Jacobson was highly resistant to input from Schwager.
b. Jacobson challenged Schwager's authority over projects on both
professional and supervisory levels.
c. Jacobson did not feel his work needed to be reviewed by Schwager.
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45. The renovation work began in July 1999 and lasted until approximately May 2000.
46. Each phase of the project was monitored by DGS's Bureau of Engineering and
Architecture.
a. Melvyn Jacobson had supervisory responsibility over the project's progress.
1 Schwager delegated this responsibility to Jacobson due to the work
load of the Architectural Design Division.
b. Schwager had the ultimate responsibility for the Architectural Design
Division of the Bureau of Engineering monitoring role in the Lottery
renovation project.
c. Periodic reports were submitted by Architectural Design Division's
monitoring the project.
47. In March 1999, prior to the beginning of the construction phase of the renovation
project, Jacobson became uncomfortable continuing to oversee the project due to
his wife no longer being employed by the Pennsylvania Lottery.
a. Robin Costenbader- Jacobson was terminated as Deputy Executive Director
of Lottery effective February 12, 1999.
48. On March 11, 1999, Jacobson authored a memo, which Schwager signed, to
Lottery Executive Director Daniel Cook advising that Melvyn Jacobson would not be
able to continue on the project.
a. The memo advised that the project would be directly managed by Schwager
with support from Jacobson as required.
49. Schwager was listed as project manager in name only.
a. Jacobson continued to be the Architectural Design Division employee most
involved with the Lottery project.
50. Although Schwager advised Cook that Jacobson would not be directly involved with
the Lottery project, he continued to delegate responsibility for the project to
Jacobson.
51. Jacobson continued to be directly involved with the project during the construction
phase but avoided personal dealings with representatives of Lottery.
a. Jacobson approved cost estimates.
b. Jacobson reviewed and approved Brenda DiSante's work including
architectural field reports prepared by DiSante between July 8, 1999, and
May 3, 2000.
c. Jacobson continued to deal directly with Brett Crans, the project general
contractor.
d. Jacobson developed cost estimates for the mural.
52. Brenda DiSante, Architectural Designer, DGS, was assigned to oversee the day -to-
day operations of the project around May or June 1999.
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Page 13
a. DiSante completed architectural field reports based on project meetings and
site visits on either a weekly or bi- weekly basis between July 8, 1999, and
May 3, 2000.
b. DiSante provided Jacobson and Schwager with regular project updates.
1. DiSante's immediate supervisor was Jacobson.
2. Jacobson had the responsibility to approve all actions taken by
DiSante.
53. Jacobson sent or received the following pieces of correspondence relating to the
project after March 11, 1999.
a 06/02/99: Received fax transmission from Crans regarding revised
construction schedule.
b 06/02/99: Sent memo to fifteen (15) recipients, including Schwager,
detailing construction schedule.
c. 06/10/99: Sent memo to sixteen (16) recipients including Schwager
identifying the modified construction schedule.
d. 06/13/99: Sent memo to Jennings Ward approving construction costs and
construction schedule.
e. 06/14/99: Sent memo to Jennings Ward regarding budget adjustment.
f. 07/08/99: Received fax transmission from Brett Crans regarding need for
Labor & Industry approved plans for permit for demolition to be issued by
township.
g. 7/22/99: Received memo from Brett Crans regarding conduit drops for
telephone and computer cabling.
h. 08/02/99: Received memo from Brett Crans regarding need for
authorization from Architectural Design Division to allow general contractor
to close up walls left open for conduit drops.
J.
08/30/99: Received memo from Brett Crans regarding change orders
including added charges of $2,366.00 to install MDO board on mural wall.
09/13/99: Received memo from Brett Crans regarding breakdown of
Cumberland Managements project contribution of $173,815.
k. 10/04/99: Received memo from Brett Crans detailing the completion of
Phase I of the project.
01/14/00: Received memo from Brett Crans regarding credit for change
order to delete the wall mural from the project.
54. On 06/14/99 Jacobson authored a memo to Jennings Ward, DGS Real Estate
Division, which provided as follows:
"I have reviewed the additional costs indicated by Brett Crans of Cumberland
Management and am in agreement with the additional charges. I have attached a
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Page 14
signed budget adjustment sheet and will send you the hard copy through the mail."
a. Attached budget adjustment dated 06/09/99 increases:
Phase I Temporary Electric $ 6,120.92
Phase II Ramp Access $ 10,364.26
Phase IV Floor $ 6,767.82
$ 23,253.00
b. The budget adjustment was signed and approved by Melvyn Jacobson,
Architectural Designer Supervisor 06/14/99.
c. These approvals resulted in the final approval of amendment 3 to lease No.
99069 -3 on July 6, 1999.
d. Jacobson did not advise Schwager of these items.
55. On June 13, 1999, Jacobson authored a memo to Jennings Ward indicate [sic] that
Jacobson concurred with Brett Crans /Cumberland Management's breakdown of the
four phases of work as outlined by correspondence dated May 5, 1999, from Brett
Crans to Jennings Ward.
a. Construction was slated to begin on July 12, 1999, with the following
construction schedule:
1. Phase I 8 weeks
2. Phase II 6 weeks
3. Phase III 3 weeks
4. Phase IV 4 weeks
56. Sometime prior to October 1999, following Jacobson's participation in the approval
of the lease amendment and the initiation of the project, Schwager and Jacobson
discussed the mural aspect of the project.
a. Schwager discussed with Jacobson the vendor to be selected.
b. Schwager informed Jacobson that he was interested in painting the mural.
57. In or about July 1999 Crans delegated authorization to Jacobson to secure the
services of a vendor to paint the mural.
a. Jacobson did not advise Schwager of this arrangement.
b. Brett Crans obtained bids for all other portions of the project with the
exception of the wall mural on behalf of Cumberland Management.
c. Crans, as Property Manager for Cumberland Management, served as the
general contractor on the project.
58. In or about July to September of 1999, Jacobson informed Brett Crans that he knew
an employee who could handle the task.
a. Jacobson did not initially identify Mark Schwager as the employee who
would be able to handle the task.
Schwager, 00- 031 -C2
Page 15
b. Schwager did not authorize or was aware of Jacobson's discussions with
Crans.
59. Jacobson informed Crans that the mural could be traced, painted in sections and
assembled like a puzzle.
a. Jacobson discussed using MDO board for the mural to be painted on.
60. On or about July 15, 1999, Schwager noticed that Home Depot had MDO board
which could be used for the mural.
a. Schwager informed Jacobson that Home Depot had the material at a good
price.
61. Cumberland Management was informed that Home Depot had the material.
62. Cumberland Management purchased thirty -nine (39) pieces of MDO board from
Home Depot, 6000 Carlisle Pike, Mechanicsburg, PA 17055, on July 15, 1999.
a. Cumberland Management bore the entire cost of the MDO board which
totaled $450.50 delivered.
b. Home Depot delivered the MDO board directly to Lottery headquarters in
Middletown, PA.
1. No state employees or equipment were used to deliver the MDO
board.
63. Between July and October 1999, Jacobson and Schwager again discussed
Schwager being involved with the mural design.
a. At that time, neither Schwager nor Jacobson had any formal agreements
with Cumberland Management to paint the mural.
b. Jacobson encouraged Schwager to do the project on several occasions
during this period.
1. Schwager had not committed to the project until at least September or
October 1999.
64. Jacobson did not solicit bids for any potential contractor for the mural portion of the
project.
a. Schwager was unaware that bids or quotes were not solicited.
65. Project art associated with DGS projects is normally handled by way of request for
proposals submitted by artists.
a. DGS employees do not perform art design work as part of their normal job
functions.
66. On or about October 5, 1999, Jacobson informed Crans that he selected Mark
Schwager to paint the mural.
a. Crans believed Jacobson was going to assist Schwager with painting the
mural.
Schwager, 00- 031 -C2
Page 16
67. Crans required a signed agreement be executed to document the $10,000 mural
expense.
68. On October 20, 1999, Brett Crans, as agent for Cumberland Management, accepted
a written proposal submitted by G. Mark Schwager, 821 Ohio Avenue, Lemoyne,
Pennsylvania 17043, to paint a mural eight (8) feet high by 120 feet long.
a. Terms of the contract provided for Schwager to be compensated $10,000 to
paint the mural away from the construction zone, have it completed and
ready to install at the end of phase four of the project and handle any
touchup work required as part of the installation.
b. Cumberland Management was responsible for providing MDO board for the
mural to be painted on and physically attaching the painted mural panels to
the wall.
c. A $3,000 retainer fee was required upon Cumberland Management's
acceptance of the proposal.
d. Melvyn Jacobson prepared this contract for Cumberland Management on
Schwager's behalf.
69. Schwager informed Crans that he had approval to paint the mural from Schwager's
supervisor, Robert Glenn, based on the memo from Nora Doyle.
a. Crans knew that Schwager was Jacobson's immediate supervisor.
b. Crans did not question Schwager's involvement in painting the mural after
Schwager represented to Crans that DGS officials approved his participation
in the project.
70. Between July 1999 and November 1999, both Mark Schwager and Brenda DiSante
performed mural design sketches on state time in the offices of Engineering and
Architecture.
a. Schwager spent approximately 7.5 hours tracing the mural on state time.
1. Schwager was compensated by the Commonwealth at a rate of
$36.62 per hour during this period.
2. Schwager received gross compensation from the State in the amount
of $274.65 for the time he spent tracing the mural on State time.
a. Gross compensation based on 7.50 hours at $36.62 per hour.
b. DiSante spent approximately one (1) day adjusting Schwager's design to
scale.
1. DiSante prepared a design grid and adjusted the design to scale at
Schwager's direction.
2. DiSante was on state time when this occurred.
3. DiSante's hourly wage at the time was $17.31.
4. DiSante received gross compensation in the amount of $86.55 for 7.5
Schwager, 00- 031 -C2
Page 17
hours she spent adjusting the drawing to scale on state time.
71. Schwager utilized DiSante to adjust the design to scale because he believed that
since DGS controlled the design, it was their responsibility to adjust it to scale.
72. On November 3, 1999, Cumberland Management issued check number 25189 in
the amount of $3,000 to G. Mark Schwager.
a. This payment represented the retainer required for the mural contract
accepted by Crans on October 20, 1999.
b. Schwager deposited this payment into his personal account at the
Pennsylvania State Employees Credit Union on November 9, 1999.
73. At the time Schwager advised Jacobson he was interested in painting the mural,
Schwager informed Jacobson he would need help.
a. Jacobson informed Schwager he was interested in working on the project.
b. Jacobson did not enter into any written agreements with Schwager or
Cumberland Management to assist with the project.
74. On November 9, 1999, Schwager issued personal check number 4254 in the
amount of $1,000 from his PSECU account to Melvyn Jacobson.
a. A notation in the memo portion of the check states "partial on mural lottery."
b. Jacobson deposited this payment into his National Penn Bank personal
account on or about November 11, 1999.
75. Schwager issued the check to Jacobson as an advance for layout work Jacobson
was to do.
a. Jacobson did make arrangements with Crans to have Schwager paint the
mural and did prepare the contract between Cumberland Management and
Schwager.
b. During an interview with investigators for the State Ethics Commission,
Schwager stated he had to give Jacobson something.
76. Schwager and Jacobson wanted to use Lottery facilities to paint the mural during
weekends starting during the late summer or early fall of 1999.
a. Lottery officials initially had no objection, but later told Jacobson to vacate
the building due to security issues.
77. The MDO board to be used on the project was on -site at Lottery headquarters and
needed to be available for painting by Schwager.
a. William Waddington authorized Lottery warehouse employee, Tom
Thompson, to deliver the MDO board from Lottery headquarters to a site in
Harrisburg.
b. Thompson spent approximately one (1) hour making the delivery in his
personal vehicle on November 19, 1999.
c. The MDO board was moved off site to enable Schwager and Jacobson to
Schwager, 00- 031 -C2
Page 18
start painting the mural.
d. Schwager did not request Lottery personnel to move the material.
78. Lottery officials began receiving anonymous complaints about Schwager and
Jacobson's involvement with the mural sometime prior to December 8, 1999.
79. On December 8, 1999, Michael E. Adams, Director, Bureau of Real Estate, DGS,
sent a notice to Brett Crans advising Cumberland Management to suspend work on
the mural portion of the project.
a. No specific reason for this was given.
80. On December 9, 1999, Barry T. Drew, Deputy Secretary for Administration,
Department of Revenue, sent a memo to Michael E. Adams, Director, Bureau of
Real Estate, DGS, requesting that the $10,000 amount budgeted for the mural at
Lottery headquarter be cancelled.
a. No specific reason is given for the change other than the department does
not wish to have this wall mural."
81. On December 14, 1999, Michael E. Adams, Director, DGS, Bureau of Real Estate,
sent official notice to Brett Crans advising him that the mural was canceled from the
project.
a. No specific reason for the cancellation was given.
82. The mural's deletion was included as a change order on the Architectural Design
Division's December 15, 1999, field report. (Field report #17).
a. This field report was completed by Brenda DiSante with copies going to
Schwager and Jacobson.
b. Specific language on the change order was "delete wall mural from the
scope of work for this contract: deduct $10,000; it will be necessary to adjust
the contract amount to be deducted to accommodate the added costs for
partial completion of the wall mural prior to the deleted scope of work and
additional finish work to the wall that was to receive the deleted mural.
Provide invoice /cost for subcontractor costs for portion of mural completed to
date. Added costs for finishing and painting of corridor wall.
83. Schwager was informed of a DGS investigation into an alleged "violation of the
Governor's Code of Conduct" by departmental memo dated July 7, 2000.
84. On July 31, 2000, Schwager received a written reprimand from Merle H.
Ryan, Deputy Secretary for Public Works for a violation of the Governor's
Code of Conduct.
85. As part of the aforementioned disciplinary action, Schwager was directed to
repay any financial gain he received after expenses to the Department of
Revenue.
86. Schwager issued a cashier's check dated January 8, 2001, from PSECU in the
amount of $1,488.00 to the Commonwealth of PA, Department of Revenue.
a. Schwager returned this money to the State through Gregory Santoro,
Esquire, Chief Counsel, DGS.
Schwager, 00- 031 -C2
Page 19
b. The payment was made six months after receiving the written reprimand.
c. During this period, Schwager was arranging financing and received legal
advice to not communicate with the State Ethics Commission.
87. Schwager included the cashier's check along with a memo, issued to Gregory
Santoro, Esquire, dated January 10, 2001. In the memo, Schwager provides the
following explanation of events and accounting of his expenses:
Dear Greg: Thank you for your help and guidance in resolving this
matter regarding the Lottery mural. It was never my intent to abuse my
position at the Commonwealth to do the mural for personal profit or gain.
The idea for the mural inclusion in the Lottery renovation project was an
attempt to resolve a design problem, specifically to enliven a long blank wall
that was to be the focus of the new space layout. It was not conceived as a
scheme for personal gain or profit. I asked for and received permission to do
the mural because as an artist I saw it as an interesting challenge to paint.
Any violation of law was accidental; indeed I would have painted it for
nothing. Although I strongly disagree with the Department's language in
characterization of my role and conduct in this affair, I will do what has been
asked of me in the mutual interest of putting this whole issue behind us. As
such, I am enclosing a certified check in the amount of $1,488.00. This
represents full and final reimbursement of what was paid to me, less
expenses outlined in the attached facsimile. Copies of receipts and bank
statements are included. I appreciate the Department's continued trust in my
role and contributions to the Commonwealth and will maintain as I have
always that the level of confidence in my efforts on behalf of the Department
and the Commonwealth. In closing I wish to thank you again for your help in
this matter and ask you to forward this check to the appropriate entity in the
Department of Revenue so that I may be properly credited for this full and
final reimbursement. As we agreed, I am returning the money to you to
forward. Please note than an official of Lottery, Bill Fehl, has picked up all
the panels he deemed serviceable; they have no use for the paint. By copy
of this letter Cumberland Management is informed that all money Tess my
expenses paid to me for the mural are returned directly to the Department of
Revenue."
Also included is the following summary of expenses.
Date Item
11/03/99
11/09/99
11/09/99
11/15/99
11/16/99
11/20-22/99
11/20,26,27/99
12/10/99
12/11/99
01/10/01
Received from Cumberland Management
Deposit into PSECU Account
Transfer to Checking
Check to M. Jacobson, initial payment for help
Studio rental
Duron paint and supplies
Dick Blick Art Supplies
Project stopped, expenses to date
Balance outstanding at project stop date
Amount returned round up to nearest dollar
Amount
$ 3,000.00
$ 3,000.00
$ 2,000.00
$ 1,000.00
$ 150.00
$ 156.33
$ 206.41
$ 1,512.74
$ 1,487.26
$ 1,488.00
88. Schwager did not reimburse the Commonwealth for time spent by himself, Brenda
DiSante assisting on aspects of the mural project while on State time.
a. Jacobson did not reimburse the Commonwealth the $1,000.00 he received
from Schwager for his role in the mural project.
Schwager, 00- 031 -C2
Page 20
89. Schwager reimbursed the Commonwealth all of the $3,000 less the $1,000 paid to
Jacobson and $512.74 in expenses.
90. Schwager did not comply with the terms of his supplemental employment request
approved on October 17, 1997.
a. That approval forbid any business being conducted with any Commonwealth
entity or agency.
b. Information regarding the award of the mural project was provided to
Schwager by Jacobson through information received by Jacobson from
Cumberland Management.
c. Commonwealth employees were involved with defining the mural wall space
for use by the artist.
d. Schwager gave a subordinate Commonwealth employee (Jacobson)
authorization to advise Cumberland Management of his availability to do the
project.
91. Schwager did not review the 1997 supplemental employment request after receiving
approval from DGS legal staff to do the mural project.
a. Schwager believed the legal advice provided gave him authorization to
proceed.
92. Schwager filed a Statement of Financial Interests form for calendar year 1999 which
included the following information:
a. Position: Not listed.
Filed: 04/20/00 on SEC Form 1/00.
Creditors: PSECU, American Express, MBNA 15.9%
Direct /Indirect Income: Commonwealth of PA, Art Association of Harrisburg.
All Other Financial Interest: None.
b. Schwager's Statement of Financial Interests is maintained by DGS's Office
of Personnel as a public document.
93. Schwager did not disclose a payment in the amount of $3,000 received from
Cumberland Management as a source of income in excess of $1,300 during
calendar year 1999.
a. Schwager received and deposited funds from Cumberland Management
totaling $3,000 into his personal account on November 9, 1999.
94. Schwager filed an amended Statement of Financial Interests for the 1999 calendar
year on July 10, 2001.
a. The amended filing included compensation received from Cumberland
Management in 1999.
III. DISCUSSION:
Schwager, 00- 031 -C2
Page 21
At all times relevant to this matter, the Respondent, G. Mark Schwager, hereinafter
Schwager, has been a public employee subject to the provisions of the Public Official and
Employee Ethics Law, Act 9 of 1989, Pamphlet Law 26, 65 P.S. §401, et seq., as codified
by the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65 Pa.C.S.
§1101 et seq., which Acts are referred to herein as the "Ethics Act."
The allegation is that Schwager violated Sections 3(a)/1103(a) and 5(b)(5)/
1105(b)(5) of the Ethics Act when he recommended that a mural be painted in the
Pennsylvania State Lottery Building, participated in the drafting of plans, and determined
the cost for the mural; when he subcontracted with the general contractor to paint the
mural; when he utilized Commonwealth employees to assist in the drawing of the mural;
when he and Commonwealth employees did design work for the mural while on
Commonwealth time; and when he failed to disclose income received from Cumberland
Management on his Statement of Financial Interests (FIS) for the 1999 calendar year.
Pursuant to Section 3(a)/1103(a) of the Ethics Act, a public official /public employee
is prohibited from engaging in conduct that constitutes a conflict of interest.
The term "conflict of interest" is defined under Act 9 of 1989/Act 93 of 1998 as
follows:
Section 2/1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate family
or a business with which he or a member of his immediate
family is associated. "Conflict" or "conflict of interest" does not
include an action having a de minimis economic impact or
which affects to the same degree a class consisting of the
general public or a subclass consisting of an industry,
occupation or other group which includes the public official or
public employee, a member of his immediate family or a
business with which he or a member of his immediate family is
associated.
65 P.S. §402/65 Pa.C.S. §1102.
Section 3(a)/1103(a) of the Ethics Act prohibits a public official /public employee
from using the authority of public office /employment or confidential information received by
holding such a public position for the private pecuniary benefit of the public official /public
employee himself, any member of his immediate family, or a business with which he or a
member of his immediate family is associated.
Section 5/1105. Statement of financial interests.
(b) Required information. - -The statement shall include the
following information for the prior calendar year with regard to
the person required to file the statement.
(5) The name and address of any direct or indirect
source of income totaling in the aggregate $1,300 or more.
Schwager, 00- 031 -C2
Page 22
However, this provision shall not be construed to require the
divulgence of confidential information protected by statute or
existing professional codes of ethics or common law privileges.
65 P.S. §402(b)(5)/65 Pa.C.S. §1105(b)(5).
Section 5(b)(5)/1105(b)(5) of the Ethics Act requires that every public official /public
employee and candidate list the name and address of any direct or indirect source of
income totaling in the aggregate of $1,300 or more.
As noted above, the parties have submitted a Consent Agreement and Stipulation of
Findings. The parties' Stipulated Findings are reproduced above as the Findings of this
Commission. We shall now summarize the relevant facts as contained therein.
Schwager has been employed in the Bureau of Engineering and Architecture (BEA)
with the Department of General Services (DGS) since April of 1989. Schwager, as Chief of
the Architectural Design Division (ADD), has overall responsibility for supervising all
employees within the ADD and acts as the architect of record for all in -house design
projects completed by ADD.
On occasion, DGS employees seek to have supplemental private employment.
DGS may approve supplemental employment provided it does not constitute a conflict of
interest for its employees. In August of 1997, Schwager filed a request for supplemental
employment to perform privately commissioned artwork as a self - employed artist.
Schwager received approval for supplemental employment in October of 1997, subject to
the following conditions: no business could be conducted with any Commonwealth
agency; information or data from Commonwealth employment could not be used for private
business; private business could not conflict with Commonwealth employment; no
solicitations related to supplementary employment could be made during Commonwealth
working hours at Commonwealth facilities; Commonwealth property could not be used for
supplemental activities; and private business could not be conducted in Commonwealth
offices at any time.
Between 1998 and 2000, BEA became involved with a renovation project for the
Lottery Bureau (LB) which is a division of the Pennsylvania Department of Revenue (PDR).
The LB is housed in Middletown in premises leased from Heartland Properties, a limited
partnership trading as Cumberland Management (CM).
When the property manager of CM contacted LB officials in March of 1998
regarding the possibility of the lease renewal, it was determined that the property needed
to be renovated if LB would continue there and renew the lease. Following discussions
between LB employees and CM, a decision was made to seek design changes from BEA
for the layout of the building.
On January 14, 1998, the Director of Administration of LB submitted a work request
to DGS which entailed the renovation of the office space for LB. Although it is unusual for
ADD to design layouts for Commonwealth space in privately owned buildings, DGS
became involved because Robin Costenbader- Jacobson, the Deputy Executive Director of
LB and spouse of Melvin Jacobson (Jacobson), who is an employee in ADD of DGS,
requested such involvement. Schwager as ADD Chief was assigned the project which
included conducting a survey and cost estimate for the LB renovations. Because
Jacobson's spouse was involved in the project, Schwager assigned Jacobson as the
project supervisor to conduct the survey and provide the cost estimates.
Jacobson completed the renovation design drawings in April of 1998 as
Architectural Supervisor for DGS. Jacobson used a main street storefront as a theme
Schwager, 00- 031 -C2
Page 23
concept for the project. The project included one wall, which was at least 120 feet in
length, that was barren. Schwager and Jacobson discussed various options to finish the
120 -foot wall and decided that a mural depicting Pennsylvania would be a viable option.
Jacobson asked for a cost estimate of a mural from Schwager who provided a rough
estimate of $10,000. Jacobson then proposed the mural to the building committee of LB
which concurred with the mural idea even though it was not requested. The $10,000
estimate for the mural was included in the project cost developed by Jacobson. Project
expense summaries were prepared by Jacobson and reviewed and approved by
Schwager.
During discussions between Schwager and Jacobson in the fall of 1999 regarding
the LB project, Schwager was asked by Jacobson to assist with the mural. In November of
1998, Schwager approached his supervisor, Bureau Director Robert Glenn (Glenn), for
permission to paint the mural for the LB renovation project and receive compensation.
Schwager initially thought that LB would solicit bids for the mural. Subsequently,
Schwager did not inform Glenn that he was going to contract with CM to paint the mural
and Glenn would not have granted permission to Schwager if he knew that information. An
assistant counsel at DGS gave a qualified approval as to Schwager's request, being
unaware that Schwager was going to perform the work for a private contractor rather than
the Commonwealth.
Both Schwager and Jacobson, as DGS employees, were responsible for the review
and approval of project cost estimates for the LB project prior to the commitment of any
Commonwealth funding. After PDR approved funding for the LB project in the amount of
approximately $640,000 in July of 1999, DGS's agent for PDR entered into a lease with
CM, the purpose of which was to provide funding for the renovations to LB's leased
headquarters and extend the lease for a five year period. The renovation work was to be
done in four phases. The completion of the wall mural was not needed until the end of the
last phase. The project expense summary contained a budget in the amount of $10,000
for the mural. Jacobson, as the lead architect, had primary responsibility of the project
expense summaries and the design layout. The renovation project began in July of 1999
and ended in May of 2000. Each phase of the project was monitored by BEA. Jacobson
had supervisory responsibility over the project's progress.
After Jacobson's spouse was terminated as Deputy Executive Director of LB in
February of 1999, Jacobson became uncomfortable with continuing to oversee the project.
Jacobson wrote a memo that he would not continue on the project, which would be directly
managed by Schwager. Even though Schwager was listed as project manager, Schwager
continued to delegate responsibility for the project to Jacobson who continued to be the
ADD employee who was most involved with the project. Although Jacobson avoided
personal dealings with LB representatives, he continued to be involved with the project
during the construction phase.
In the spring of 1999, Brenda DiSante (DiSante), an architectural designer at DGS,
was assigned to oversee the day -to -day operations of the project. DiSante provided
regular project updates to both Schwager and Jacobson, her immediate supervisor.
Schwager and Jacobson again discussed the mural project in the fall of 1999. After
Schwager and Jacobson discussed the vendor for the mural, Schwager stated that he was
interested in painting the mural. In July of 1999, Crans, CM's Property Manager and
general contractor for the project, delegated the authorization to Jacobson to secure the
services of a vendor to paint the mural. In late summer of 1999, Jacobson informed Crans
that he knew an employee who could handle the task. Initially, Jacobson did not identify
Schwager as the employee. After it was determined that the mural could be traced,
painted in sections, and assembled like a puzzle, Jacobson discussed using MDO board
with Crans. The MDO board was obtained at a cost of $450 which was paid by CM.
Jacobson and Schwager had further discussions regarding Schwager being involved with
Schwager, 00- 031 -C2
Page 24
the mural design, even though there was no formal agreement with CM as to painting the
mural.
Although project art associated with DGS normally requires proposals submitted by
artists, Jacobson informed Crans that he selected Schwager to paint the mural. Crans
insisted upon a signed agreement for the $10,000 mural expense. On October 20, 1999,
Crans, as agent for CM, accepted a written proposal by Schwager to paint a mural 8' x
120' for a fee of $10,000. Schwager informed Crans that he had approval to paint the
mural from his supervisor, Glenn, based upon a memo from an assistant counsel in DGS.
Between July and November of 1999, Schwager and DiSante performed mural
design sketches on Commonwealth time in BEA offices. The details of such work activities
are set forth in Fact Finding 70.
In November of 1999, CM issued a $3,000 retainer check to Schwager as per the
mural contract. Schwager informed Jacobson that he needed help with the mural painting
project. Schwager was advised by Jacobson that he was interested in working on the
project. In November of 1999, Schwager issued a check in the amount of $1,000 to
Jacobson with a notation, "partial on mural lottery." The check issued to Jacobson by
Schwager was an advance for future layout work by Jacobson.
Although Schwager and Jacobson wanted to use LB facilities to paint the mural
during weekends, LB officials initially had no objection but later told Jacobson to vacate
the building due to security issues. The MDO board was then moved off -site to enable
Schwager and Jacobson to paint the mural.
After LB officials began receiving complaints about Schwager's and Jacobson's
involvement in the mural project in early December of 1999, the Real Estate Bureau
Director of DGS sent notice, without specifying any reason, to Crans advising that CM
should suspend work on the mural portion of the project. The PDR Deputy Secretary of
Administration sent a letter to the Real Estate Bureau Director requesting that the $10,000
budgeted for the mural be canceled. The Real Estate Bureau Director of DGS then sent
official notice to Crans advising that the mural was canceled as part of the project. The
mural's deletion was listed as a change order in ADD's field report of December 15, 1999.
After Schwager was informed of a DGS investigation as to a possible violation of the
Governor's Code of Conduct, he received a written reprimand in July of 2000 from the
Deputy Secretary for Public Works for violating the Governor's Code of Conduct.
Schwager was directed to repay any financial gain he received, less expenses, to PDR.
Schwager made payment in the amount of $1,488 to the PDR. Schwager did not
reimburse the Commonwealth for the time he and DiSante spent working on the mural
project during Commonwealth work hours. Similarly, Jacobson did not reimburse the
Commonwealth the $1,000 he received from Schwager for his role in the mural project.
Schwager reimbursed the Commonwealth the $3,000 less $1,000 paid to Jacobson and
less $512.74 in expenses.
Schwager did not comply with the terms of his supplemental employment in the
following respects: any business being conducted with the Commonwealth was forbidden;
information regarding the award of the mural project was provided to Schwager by
Jacobson through information received from CM; Commonwealth employees were involved
in defining the mural wall space; and Jacobson was given authorization by Schwager to
advise CM of his ability to do the project.
Lastly, although Schwager did not disclose the $3,000 payment received from CM
as a source of income on his FIS for the calendar year 1999, Schwager amended his FIS
on July 10, 2001, listing that source of income.
Schwager, 00- 031 -C2
Page 25
Having highlighted the Stipulated Findings and issues before us, we shall now apply
the Ethics Act to determine the proper disposition of this case.
The parties' Consent Agreement sets forth a proposed resolution of the allegations.
The Consent Agreement proposes that this Commission find that: Schwager violated
Section 3(a)/1103(a) of the Ethics Act by participating in the drafting of mural plans,
contracting with the general contractor to paint the mural, utilizing Commonwealth
employees to assist and drawing to scale the mural; Schwager committed a technical
violation of Section 5(b)(5)/1105(b)(5) when he failed to disclose income received from
Cumberland Management on the Statement of Financial Interests filed for the 1998
calendar year; and Schwager will make a payment of $1,000 through this Commission to
the Commonwealth of Pennsylvania within 30 days of the date of the mailing of this Order.
In applying 3(a)/1103(a) of the Ethics Act to the instant matter, there were numerous
uses of authority of office on the part of Schwager. Schwager, both as the Chief of ADD
and as the supervisor for Jacobson, was involved in the LB renovation project. Such
involvement entailed various aspects of the project such as the layout, the renovation
costs, and even specifics, such as painting a mural for a barren wall space that was 120' x
8' in size. Although Jacobson was originally the individual in charge of the project,
Schwager as his immediate supervisor, had duties and responsibilities of review and
approval. Specifically, as to the mural, it was through discussions between Schwager and
Jacobson that the concept arose for painting a mural on the barren wall space in the LB
premises. Schwager was selected as the artist who would paint the mural as a result of
further discussions between him and Jacobson. Schwager also used DiSante, an
employee of DGS, to provide assistance as to the mural during Commonwealth business
hours. The forgoing are all instances of uses of authority of office by Schwager. See,
Juliante, Order 809. Such uses of authority resulted in a pecuniary benefit to Schwager
consisting of the $10,000 contract he obtained for painting the mural. The pecuniary
benefit was private because there was no authorization in law for Schwager to receive
such a payment. See, Akerly, Order 976. In fact, such employment would not have been
approved as noted above. The terms under which Schwager obtained the contract for the
mural were contrary to the conditions imposed upon him as to his request for supplemental
employment. Accordingly, the pecuniary benefit was a private one. Lastly, that pecuniary
benefit inured to Schwager himself as the individual who would paint the mural for the
$10,000 fee. Accordingly, Schwager violated 3(a)/1103(a) of the Ethics Act when he
participated in drafting of mural plans, contracted with a general contractor to paint the
mural, and utilized Commonwealth employees to assist and draw the mural to scale.
As to the FIS matter, the stipulated findings reflect that Schwager did not disclose
his $3,000 retainer from CM for painting the mural on his 1998 calendar year FIS. As
noted above, Section 5(b)(5)/1105(b)(5) of the Ethics Act requires the listing of the name
and address of all sources of income which exceed $1,300. Accordingly, Schwager
technically violated 5(b)(5)/1105(b)(5) of the Ethics Act when he failed to disclose income
in excess of $1,300 from CM on his FIS for the 1998 calendar year.
We determine that the Consent Agreement submitted by the parties sets forth the
proper disposition for this case, based upon our review as reflected in the above analysis
and the totality of the facts and circumstances. Accordingly, Schwager is directed make a
payment of $1,000 through this Commission to the Commonwealth of Pennsylvania within
30 days of the date of the mailing of this Order. Compliance with the foregoing will result
in the closing of this case with no further action by this Commission. Noncompliance will
result in the institution of an order enforcement action.
IV. CONCLUSIONS OF LAW:
Schwager, 00- 031 -C2
Page 26
1. Schwager, as an Architectural Manager I in the Pennsylvania Department of
General Services, is a public employee subject to the provisions of Act 9 of
1989/Act 93 of 1998.
2. Schwager violated Section 3(a)/1103(a) of the Ethics Act when he participated in
drafting of mural plans, contracted with a general contractor to paint the mural, and
utilized Commonwealth employees to assist and draw the mural to scale.
3. Schwager technically violated Section 5(b)(5)/1105(b)(5) of the Ethics Act when he
failed to disclose income in excess of $1,300 from CM on his FIS for the 1998
calendar year.
In Re: G. Mark Schwager
ORDER NO. 1219
File Docket: 00- 031 -C2
Date Decided: 8/23/01
Date Mailed: 9/7/01
1 Schwager, as an Architectural Manager I in the Pennsylvania Department of
General Services, violated Section 3(a)/1103(a) of the Ethics Act when he
participated in drafting of mural plans, contracted with a general contractor to paint
the mural, and utilized Commonwealth employees to assist and draw the mural to
scale.
2. Schwager technically violated Section 5(b)(5)/1105(b)(5) of the Ethics Act when he
failed to disclose income in excess of $1,300 from Cumberland Management on his
FIS for the 1998 calendar year.
3. Per the Consent Agreement of the parties, Schwager is directed to make payment
to the Commonwealth of Pennsylvania through this Commission in the amount of
$1,000 within 30 days of the issuance of this Order.
a. Compliance with the foregoing will result in the closing of this case with no
further action by this Commission.
b. Non - compliance will result in the institution of an order enforcement action.
BY THE COMMISSION,
DANEEN E. REESE, CHAIR